European Law Monitor

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Commission adopts new rules for managing electricity cross-border trade in the EU

The Commission adopted amended guidelines for managing the electricity cross-border trade in the EU on 10th November. These new rules improve the way the electricity transmission system in the EU is operated. They require improved cooperation between Transmission System Operators (TSOs) to allocate cross-border flows and manage bottlenecks in the transmission network. TSOs have to use a common method to allocate transmission capacity considering the European network as one single network.

"The blackout last Saturday demonstrated how important proper management of the European electricity transmission network is. These guidelines are a great step forward in the development of the internal energy market, and a positive example of improved cooperation between regulators", said Energy Commissioner Andris Piebalgs.

These guidelines have been adopted days after Commissioner Piebagls’ call for an urgent meeting of the group of regulators to investigate in the causes of the blackout. The Commissioner will propose in January a set of measures to permit Transmission System Operators to work in a legally established group with a mechanism to adopt legally binding security and operational rules. Currently, TSOs work on voluntary agreements with no enforcement system to monitor the application of their voluntary rules.

On the other hand, ERGEG, the Group of European Energy Regulators, have the power to prepare guidelines like the ones approved today, which are consequently adopted by the Commission after a positive opinion by the Electricity cross-border committee where Member States are represented.

These "Guidelines on the management and allocation of available transfer capacity of interconnections between national systems" or often called "congestion management guidelines" contain a series of rules which aim at efficient use of the European electricity network with full respect to security requirements. They will lead to harmonisation of the cross-border trade in Europe, allowing different products to be traded with different durations from yearly down to intra-day timeframes.

In the guidelines Europe is divided into seven regions based on the physical reality of the network. South-East Europe will be the eighth region applying the same rules through the Energy Community Treaty. This regional approach is a pragmatic intermediate step towards a fully integrated internal electricity market.

Transparency is a central topic in the guidelines. A full set of information on the transmission network, on electricity trade and flows as well as on power plants need to be published in order to create a level playing field for market participants.

The guidelines adopted by the Commission amend the existing guidelines which are annexed to the regulation 1228/2006 on cross-border trade in electricity. These amended guidelines enter into force twenty days after their publication in the official journal.